Two men from New York have been sentenced for their alleged involvement in a multimillion-dollar mortgage fraud scheme in Hartford, Connecticut, according to the U.S. Department of Justice.
Authorities said 58-year-old Jacob Deutsch and 63-year-old Aron Deutsch were sentenced for their role in a wide-ranging fraud scheme involving 24 mortgage loans on several multi-family housing properties in Hartford.
The loans amounted for nearly $50 million, according to officials. Jacob and Aron work at B H Property Management, LLC (BHPM) - a company that manages multi-family housing properties in the capitol city.
According to court documents, from September 2016 through May 2021, Jacob allegedly ran the day-to-day operations while Aron engaged in a scheme to defraud several financial institutions, including Freddie Mac, Fannie Mae, the U.S. Department of Housing and Urban Development, and more. Officials said Aron provided these institutions with false information overstating the value of multi-family housing properties managed by BHPM.
As a part of this scheme, authorities said Jacob provided fake rent rolls and falsified leases, which either overstated the number of renters or inflated the amount of rent paid by tenants. Officials went on to say that Jacob deceived inspectors into believing that empty apartments were occupied by staging them with furniture and requiring employees to say they lived there.
In one instance, Jacob falsely reported that 16 Evergreen Ave. was fully occupied when, in fact, not a single tenant lived there, according to documents.
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The U.S. Department of Justice said Jacob also provided financial institutions with false and inflated income statements, doctored bank statements, documents, checks and invoices, and more.
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Both men were arrested in May of 2021. After his arrest and while released on bond, Jacob allegedly victimized another lender to secure an $11 million loan.
Jacob and Aron plead guilty to conspiracy to commit mail and wire fraud. It's unknown if the two men are related.
Jacob was sentenced to five years in prison followed by four years of supervised release, and Aron was sentenced to five years of probation.
Officials said Jacob has to pay a $10,000 fine and Aron was ordered to pay a $1 million fee. Jacob will report to prison on March 8. The investigation remains ongoing.
